More homeowners fall behind as variable mortgage rate pain bites

WA still leads the nation with the highest rate of mortgage arrears.Picture: WA NEWS

Interest rate rises are partly to blame for more Australians falling behind on their mortgage repayments, according to a leading ratings agency.

The number of homeowners more than 30 days behind on their repayments grew from 1.16 per cent in March to 1.21 per cent in April, S&P Global Ratings said on Tuesday.

“Part of the increase reflects a decline in outstanding loan balances, but we believe interest rate rises announced by different lenders during the past few months affected the Standard & Poor’s Performance Index for Australian prime mortgages, given that most of the loans are variable rate mortgages,” the ratings agency said.

South eastern suburbs remain popular for new homes with significant population growth

The West Australian

South eastern suburbs remain popular for new homes with significant population growth

Lenders have recently hiked rates for interest-only loans to comply with an Australian Prudential Regulation Authority’s directive in March that banks must limit higher risk interest-only loans to 30 per cent of new residential mortgages.

Queensland recorded the greatest growth in homeowners more than 30 days behind on their mortgage repayments, with arrears rising to 1.66 per cent in April, from 1.58 per cent in March.

NSW had the next largest increase, where arrears rose to 0.91 per cent, from 0.85 per cent.

WA recorded only a 0.05 per cent rise but still has Australia’s highest rate of mortgage arrears at 2.32 per cent.

The S&P report looks only at loans in Australian residential mortgage-backed securities transactions, which account for about 5 per cent of all outstanding home loans, but are considered representative of the broader market.